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The Seine-Nord canal project is now very close to being abandoned by the French Government, along with the Lyon-Turin rail link and base tunnel and about 15 other sections of the high-speed rail network, promoted in 2010 under the ‘Grenelle’ package of measures for the environment (reported by Les Echos)

An ‘excuse’ for abandoning the canal project, which is the subject of transnational agreements with Belgium and the Netherlands, is the increase in estimated cost of the 106km long canal, with 7 locks, from €4.5 billion to €5 or 6 billion. The statement by Secretary of State for the Budget Jérôme Cahuzac also calls into question the economic viability of the project.

The article in Les Echos underlines the difference in treatment between railway and waterway projects mentioned in the July 6 post on this subject.

a) The high-speed railway lines where works have already started are saved from the chop; the preparatory works already carried out on Seine-Nord appear to count less; they include the lowering of a section of the A29 motorway to allow for the future aqueduct.

b) The economic return on the canal is doubted, but no mention is made of the rate of return on the railway projects; assumptions are made, fuelled by environmentalist policies, on the network benefits of adding new sections to the rail network, while the network effect of linking the Seine basin to the Rhine is ignored or at least underestimated in a purely financial analysis. (It takes time to set up new logistics practices and transport chains.)

The competitive dialogue between VNF, project authority, and the two candidates, Bouygues and Vinci, is to be completed by October, but it seems that the construction giants have themselves been playing into the hands of the new Government, by preparing for abandonment of the project. They have been ‘going through the motions’, while possibly even agreeing that the project was a non-starter and increasing the cost estimates. The limits of the PPP exercise have been starkly revealed.

Evidence of this possible ‘death foretold’ is the attitude of the two companies, whose leaders hardly reacted to the news, as if they had themselves been promoting what Les Echos describes as an inevitable ‘return to reality’.

It remains to see what pressure the European Commission and the Belgian and Dutch partners in the Seine-Scheldt project can bring to bear on the French Government, to restart the project on a sounder basis. The EU’s funding share for the Lyon-Turin base tunnel would alone pay for the new canal! Even at €6 billion, the cost of the canal is only a fraction of the €260 billion cost of all the the planned high-speed rail lines.

Barge owners and operators will contribute up to half of the cost of building the 106km long Seine-Nord Europe canal through the toll levied by the canal’s future private-sector operator.
Two approaches were discussed at a meeting on April 18 in Ghent, bringing together VNF, Waterwegen & Zeekanalen (Flanders) and Service Public de Wallonie (Wallonia).
The first, proposed by the project partners, involves charging more for goods that are ‘captive’ or most likely to be carried by water, such as agricultural products, bulk minerals and metals, and less for goods more difficult to win from road and rail, such as containers.
The carriers argued on the contrary for a toll indexed on the value of the cargoes.

Route of the Seine-Nord Europe Canal, close to the existing Canal du Nord, which will be abandoned except for the short connecting length with four locks north of Péronne

The proposed tolls range from €2 to €4.90 per tonne, according a report in the French magazine NPI – Navigation, Ports & Intermodalité.
These tolls were set at a level corresponding to 30% of the saving in transport costs offered by the canal.
This means that the carrying industry will retain 70% of the benefit of the reduction in transport costs.

It remains to select the private-sector partner to design, build and operate the waterway, although the competitive dialogue process should be completed in the coming weeks.

Watch this space!

Artist's impression of aqueduct carrying the new canal over the A29 motorway